Grangemouth strike will leave Scotland with 'no fuel for a month'
By John Bynorth and Rachelle Money

SCOTLAND is today facing the nightmare prospect that it will be without fuel for at least a month' if a strike by workers at the country's only crude oil refinery goes ahead as planned.

The company which runs the Grangemouth plant has begun shutting down its operations on safety grounds after 1200 workers voted to take part in a two-day stoppage from 6am next Sunday INEOS, which also supplies the north of England, issued the warning as the dispute with the Unite union over changes to the firm's lucrative pension scheme escalated to the point where ordinary motorists could face a serious petrol shortage and businesses could go to the wall.

Yesterday saw a day of claim and counter claim as the union and the company, which took over the plant from BP in 2005, fought out a bitter public relations battle for the moral high ground.

Both sides agreed on one thing. Unless a strike is averted, the production slowdown at the Stirlingshire refinery will see a reduction in fuel reaching suppliers by Friday, leaving Scotland without fuel for at least a month' as the plant will take time to be re-start its operations following the strike.

The situation is so serious that Scotland's most senior ministers met in emergency session on Friday to discuss how any strike will be handled soon after talks broke down. But the government is not planning to mediate the talks to avoid a strike. Justice secretary Kenny MacAskill chaired the meeting of the emergency planning sub-committee, which was also attended by the finance minister, John Swinney, deputy First Minister Nicola Sturgeon and the environment and rural affairs minister, Richard Lochhead at St Andrews House on Friday. They put in place measures to maintain essential supplies.

Officials are in touch with the Department for Business, Enterprise and Regulatory Reform, which co-ordinates the UK response to the significant distribution of UK oil supplies, the Association of Chief Police Officers, the five major oil giants and several large truck companies following the fuel blockades of refineries by hauliers in 2000 - the last petrol crisis the country faced.

The document outlines emergency measures laid down under the Energy Act 1976 to restrict fuel purchases and prioritise it for the emergency services and utility companies. Criminal penalties can be handed out to anyone caught using fuel for other purposes.

It also includes details of the communications strategy which would be a key part of the UK government-led strategy to calm the public which stresses the importance of identifying key messages' to reassure people.

A series of calming measures' aimed at preparing motorists for fuel shortages, which include advice on how to drive more economically and suggestions to use public transport, and an allocation scheme for bulk users of petrol fuels are part of the memo, which is published in full on the Sunday Herald's website.

The Scottish government also accused both sides of trading blows through the media, instead of through negotiations over the dispute, which centres on changes INEOS wants to make to the final salary pension salary which is non-contributory, unlike most other private companies in the UK.

The firm claims a quarter of the entire money spend on employees goes towards funding the pension scheme, and wants them to pay 6% of their wages, phased over the next seven years, into the fund.

INEOS said it plans to invest £750million using the money saved to turn the plant into a world class' facility which can compete with the rest of the world.

In said in a statement the company said: "Union action has left INEOS with no option but to begin shutting down the site immediately. Fuel shortages are likely to begin in Scotland as early as Friday, April 25, and the whole of Sctland could be without fuel for at least a month.' It continued that the decision to strike will also effectively close down a large proportion of the North Sea oil production and some gas production' as supplies will dry up, affecting the whole of the UK.

Unite spokesman Richard O'Brien accused the company of being intransigent' and going into a public relations frenzy' in attacking the workforce.

He claimed the company has spent the £40m pension pot it inherited after taking over the refinery from BP in 2005 on buying other business, a claim which INEOS has described as completely untrue' and maintains that every penny' is untouched.

O'Brien added: "It's not only the only source of supply to Scotland and the north of England, but the only place where fuel comes in from the North Sea and all the airports in that area as well.

"It was suggested to me that it will take three or four days to start to run down and by the weekend petrol stations will be seeing the effect. Whatever fuel stores left in the plant have priority for the emergency services."

"It produces between one and three million a day in profit. When INEOS bought the refinery from BP, it took the former BP employees who have the best funded pension scheme in the world. It's something they have always enjoyed.

"In order to keep the pension healthy it gave a fully-funded scheme to ILEOS worth £40m. ILEOS took that to use for its acquisitions and other businesses.

"This is an extraordinarily rich company run by James Ratcliffe, one of the richest men in Europe, whose personal fortune according to Forbes magazine is between £1.3-1.8billion."

However, Tom Crotty, chief executive officer of INEOS, urged the union to agree to a sensible pension scheme' that is competitive with other private sector schemes.

He said: "Right now that pension scheme is free. They make no contributions to it whatsoever and they have a pension rate that is at the absolute top end of the scale which doesn't happen anywhere else, so they are not really living in the real world.

"Unless we can be competitive on this site in Grangemouth we can't reinvest in it. We have a re-investment plan that will cost over £750m, but why would we invest in that site if its is uncompetitive?"

Unite claimed contigency measures which could see fuel brought in from other parts of the country may not be enough to keep garage stocks replenished and warned that major airports such as Glasgow, Edinburgh and Aberdeen could be affected, particularly as the Buncefield depot in the south of England has not re-opened following a huge explosion in 2005.

A BP spokeswoman said: "We are doing our best to work with the management to try and understand the situation and the implications (of the strike). We are looking to source alternative supplies from other places to meet the demand, and are doing our best to understand what is happening. There's plenty of tanks at the airports and they have a lot of supplies at the moment."

The RAC Foundation warned motorists not to panic buy, which in the past has led to queues at garage forecourts exacerbating fuel shortages, and fears were expressed that small businesses and haulage firms could be forced out of business after fuel prices soared by more than 20% in the last year.

RAC Foundation spokeswoman Sheila Ranger said: "It's going to be difficult for the motorist, but it's important we don't see panic buying and people getting aggressive. They must plan around that and make sure the impact is minimised. The workforce has a right to make a protest about its pensions."

Stuart Mackinnon of the Federation of Small Businesses in Scotland said: "It's obviously dreadful news for Scotland, which depends on fuel, especially in rural areas. They are going to find this especially difficult. We would urge all parties concerned to resolve this matter for the good of Scotland and the good of Scottish business.

"The onus is on the government, the unions and the oil companies to make sure that this worst case scenario doesn't happen and small businesses aren't going to be affected."

Phil Flanders, director of the Road Haulage Association in Scotland and Northern Ireland, added: "It's a big worry for companies. This could push a few over if they can't get fuel. Money is so tight that a lot of them couldn't afford to buy a tank of bulk fuel in to keep them going through the strike.

"People are going to start panic buying shortly and a lot of haulers will be hoping for a solution before it happens."

Meanwhile, Tesco urged the public and media to stay calm as it had contingency plans to bring reserves of fuel up from England. Spokesman Trevor Datson said: "There is absolutely no reason for customers to panic about this. My worry is that the problem creates itself, people read about panic buying and then go out and panic buy.

"Unfortunately sometimes media reporting gets hysterical but I have to reiterate there are robust contigency plans."

One worker who spoke to the Sunday Herald on condition of anonymity at a BP garage in Paisley Road West, Glasgow, said they are bracing themselves for panic buying once news of the threatened strike spreads on Sunday.

He said: "We haven't seen any yet, but we are bracing ourselves. We fully expect it to be chaos in Glasgow. It's unbelievalge. Petrol prices have been rising so much lately that I can't blame customers for thinking that it's running out.

"A lot more customers are coming in and giving us stick for the high prices, but they don't realise we are not individually responsible.

"I remember the last time there was a fuel crisis and people were panic buying. I'm not really looking forward to next week."

Labour energy spokesman Lewis Macdonald MSP said: "The important thing is these things aren't negotiated by press release, but by getting around the table to talk about it.

"The government needs to keep a close eye from the point of view of consumer interest, but the responsibility lies with the two sides in the dispute to resolve it and avoid the kind of disruption being described as a consequence of a strike.

"Potentially a strike have a big impact as in practical terms it would be difficult to replace that level of supply at short-notice."

A Scottish government spokesperson said: "The Scottish government is closely monitoring the situation, and is fully aware of the potential disruption that could arise.

"The Scottish government is calling on both sides to get together to negotiate and resolve their differences to avert this action, rather than trading commentary in the media.

"In the meantime, the Scottish government, in line with normal procedures, initiated appropriate contingency measures last Thursday. Ministers are being kept informed of developments and are liaising with the UK government, which has responsibility for continuity of oil, gas and fuel supplies."